[Marxism] financial capitalism, Proudhon and Madoff

Rakesh Bhandari bhandari at berkeley.edu
Thu Mar 12 22:35:35 MDT 2009

The Keynesian macroeconomist Brad DeLong has been in a spirited debate with
the Chicago style economists Luigi Zingales and Michele Boldrin over
Obama's stimulus package.
The latter two have argued that the stimulus is not needed because the
crisis originates in the financial sector and that policy should be
focused exclusively on fixing them.

We hear also prominent right wing actors such as Alan Greenspan, James
Baker and Lindsay Graham openly calling for policy makers to take
seriously the nationalization of the banks.

We are hearing echoes of the old Proudhonian demand for the liquidation of
the Banque de France and its transformation into a institution of 'public
utility' together with a lowering of interest to one-half or one-fourth of
1 percent. Today even many on the left agree the  banks should be
nationalized, recapitalized and compelled to lend at low interest rates.
Others are calling for focus on the unregulated shadow business sector and
its freedom from sufficient capital requirement and restrictions on its
lending activity. But again there is a focus on financial capital.

Yet as Franz Neumann long ago noted, finance capital as identified with
banking capital has always been the target of all pseudo-socialist
movements, movements that never dared to touch the foundations of
capitalist society but rather sought a reform that would brake the
poisonous teeth off the the capitalist system and direct the deep
resentment of the masses against exploitation toward certain concrete

As William J Blake warned in the last Depression:  "It is always needful
to take the mind of the peasant from the landowner, the worker from the
boss, so as to divert the class struggle from reality into a cryptic
world. In the Middle Ages it was religion, today it is 'the monetary
mechanism.'" New Masses, vol 19 1936, p. 20

And there is always the danger that a Bernie Madoff will come to represent
the prototypical personality of a financier.

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